Little Canoe Creek Megasite Development Feasible But Would Have Lengthy Return

It would be feasible to develop the Little Canoe Creek Industrial property as a megasite, Mike McCain, executive director of the Gadsden-Etowah Industrial Development Authority, told the Etowah County Commission Tuesday in a work session. However, there could be a lengthy wait for any return on the county’s investment.

McCain told the commission it would cost a minimum of $21 million to development the property as a megasite, but when the development reaches that point, the state would kick in a lot of the costs.

However, the state will not pay any money until a prospective development commits, said Greg Knighton, vice president of the Economic Development Partnership of Alabama. Grants are tied to the number of jobs created.

“In other words, (the state) will not do it without a bird in hand,” District 1 Commissioner Joey Statum said.

McCain said development of the property as a megasite would be very expensive.

“Any return could be lengthy,” he said. “Megasite developments don’t come around often. They are rare. This property is the only chance we have to compete. It’s the only option to ever be able to compete with sites like Honda or Mercedes.”

As an example, he said, the development of the property where the Volkswagen plant is located, north of Chattanooga, Tenn., began more than 20 years ago.

There are many options to pursue, McCain said, highlighting the differences between a megasite, a traditional industrial park, commercial development or a low-impact project such as a sports complex.

The property is between Interstate 59 and U.S. Highway 11, about four miles from the Steele exit on Interstate 59. The site will be accessible from Steele Station Road, I-59, U.S. Highway 11 and by rail.

It started out as about a 200-acre tract, and the commission gradually has increased the acreage through the years to the current level of about 850 acres, making it the largest site of its type in Northeast Alabama.

Since 2008, the commission has spent about $2.6 million for the purchase of land.

A megasite requires a minimum of 1,000 acres. “The purchase of additional land is a prerequisite,” McCain said.

He said the recent Hyundai development in Montgomery is 2,000 acres.

Engineering plans for roads, water and sewer expansions would have to be in place and approved, McCain said, although the work will not have to be completed.

The engineering costs alone for the four-lane project of U.S. Highway 11 are $750,000. The total cost would be $8.5 million, but again, some of the costs would be eligible for state funds for development.

“On any high-impact project, it would be very important to have the engineering plans up front,” McCain said.

To have the property designated as a megasite, several factors have to be complete.

“The more you have done, the higher on the list you are for consideration,” said Burt Hankins, director of engineering at Goodwyn, Mills and Cawood, an architectural and engineering firm.

McCain stressed to the commissioners that to be competitive in the search for a potential development, the site needs to be ready.

All the work does not have to be done up front, he said, but it is necessary to know what options are available and have engineering plans in place.

McCain’s figures show an estimate of about $2.26 million in up-front costs to market the site and $21 million in development costs to sell it. He has said it will cost about $450,000 to purchase the remaining land to reach the required 1,000 acres for megasite designation.

Bids for an access road recently were rejected, but the commission voted to seek new bids in hopes that making a few changes to the specifications might bring a lower price.

That estimate so far is about $1.4 million. The cost still would be over $1 million. It would include building a road to grade level and include necessary drainage, but would not include any pavement. It merely would give access to the property from U.S. Highway 11 to the railroad track.

Hankins said railroad access for the property is a big plus and something only a few industrial sites have.

Water and sewer line extensions would be costly, about $10 million, but the actual costs would be unknown until an agreement is reached with the water and sewer providers and their distance from the site is considered.

McCain said he doesn’t suggest an industrial park with several smaller developers, because the number of employees that type business would attract would be between 200 and 250. That would provide insufficient economic benefits to qualify for large amounts of grants to pay for infrastructure improvements.

He said a low-impact project such as a sports complex would cost significantly less up front, about $3.1 million, the lowest development costs by far, but also would have the lowest economic impact.

Commission Chairman Larry Payne said he is concerned because of the unknowns — what return the county might receive for the investment and the length of the project.

Payne said many industrial sites are given property at almost no cost, and given another 10 years of tax abatements.

“I don’t know if the taxpayers of Etowah County would want to wait that long, and where do we get the money to do this?” Payne said.

Statum was the only other commissioner to voice his thoughts. He said the cost is more than originally thought, but he believes the county should pursue a megasite.

“I think this is an investment in the future,” he said. “It’s something my grandkids will be able to see a return on the investment. We’ve already got so much invested in it, I don’t see how we can not move forward.”

Times Staff Writer